RMIN 5100 Exam 2 Atkinson Questions and Answers | Latest Version | 2025/2025 |Already Passed
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RMIN 5100 Exm 2 Atkinson
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RMIN 5100 Exm 2 Atkinson
RMIN 5100 Exam 2 Atkinson Questions
and Answers | Latest Version | 2025/2025
|Already Passed
What is a coverage limitation in insurance?
A coverage limitation is a restriction on the amount or type of coverage provided by an
insurance policy, often capping the insurer’s liability.
Wh...
RMIN 5100 Exam 2 Atkinson Questions
and Answers | Latest Version | 2025/2025
|Already Passed
What is a coverage limitation in insurance?
✔✔ A coverage limitation is a restriction on the amount or type of coverage provided by an
insurance policy, often capping the insurer’s liability.
Why are exclusions included in an insurance policy?
✔✔ Exclusions are included to clarify what is not covered under the policy, helping to manage
the insurer’s risk and prevent claims for uninsurable or high-risk events.
How does a deductible impact a policyholder’s claim payout?
✔✔ The deductible is the amount the policyholder must pay out-of-pocket before the insurance
company contributes to a claim, reducing the total payout.
What is the purpose of a policy endorsement?
✔✔ A policy endorsement modifies the terms of the original policy, either adding or restricting
coverage, to better suit the policyholder's needs.
1
,How can a policyholder increase their coverage limits?
✔✔ A policyholder can increase their coverage limits by purchasing higher-limit policies or
adding endorsements that raise the coverage amount.
What is the difference between named-perils and open-perils policies?
✔✔ Named-perils policies cover specific risks listed in the policy, while open-perils policies
cover all risks except those explicitly excluded.
Why is it important to review coverage limits regularly?
✔✔ Regularly reviewing coverage limits ensures that they remain adequate for the
policyholder’s current assets and potential liabilities, avoiding underinsurance.
What is subrogation in insurance?
✔✔ Subrogation is the insurer's right to pursue a third party responsible for a loss after paying
the policyholder’s claim, seeking reimbursement.
How do co-insurance clauses affect claim payments?
✔✔ Co-insurance clauses require the policyholder to share in the cost of a claim, typically
requiring them to insure a certain percentage of the property's value to avoid penalties.
2
,What is the purpose of an aggregate limit in an insurance policy?
✔✔ An aggregate limit caps the total amount an insurer will pay for all claims during a policy
period, regardless of the number of incidents.
How does coinsurance work in health insurance policies?
✔✔ Coinsurance requires the policyholder to pay a percentage of covered healthcare costs after
meeting the deductible, sharing the cost with the insurer.
What is the difference between primary and excess insurance?
✔✔ Primary insurance pays first in the event of a loss, while excess insurance provides
additional coverage once the primary policy’s limits are exhausted.
How does the principle of indemnity apply to insurance policies?
✔✔ The principle of indemnity ensures that the insured is restored to their financial position
before the loss, preventing profit from insurance claims.
What is a liability coverage limit in a general liability insurance policy?
3
, ✔✔ A liability coverage limit is the maximum amount the insurer will pay for bodily injury or
property damage claims under the policy.
Why are policy exclusions related to intentional acts important?
✔✔ Exclusions for intentional acts prevent coverage for damages or losses caused by deliberate
actions, reducing moral hazard and fraud.
What is the difference between actual cash value and replacement cost in property insurance?
✔✔ Actual cash value accounts for depreciation in the payout, while replacement cost covers the
cost of replacing damaged property without deduction for depreciation.
How does an insurance policy’s waiting period affect claim payouts?
✔✔ A waiting period delays the payment of benefits for a specified period after a loss occurs,
particularly common in disability and health insurance policies.
What is the purpose of a self-insured retention (SIR) in a liability policy?
✔✔ A self-insured retention is the amount the policyholder must pay before the insurance
coverage kicks in, similar to a deductible but typically applies to liability claims.
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